Friday morning saw the dollar giving back more of the gains it had booked early last week and the greenback ended the week a bit weaker than it started. The CPI numbers were what sparked Friday’s selling, as the CPI came in a bit lower than forecasts. Consumer prices rose 0.4% in February, with just a 0.1% increase in the ‘core’ number (Ex. Food & Energy). The YOY gain was identical to the January reading at 2.9%, and the Core YOY figure was a bit lower at 2.2%. Apparently some of the currency traders felt these numbers may force the Fed to rethink their stimulus plans. Fed Chairman Ben Bernanke had indicated there would not be a need for another round of quantitative easing during the past few weeks, but the benign inflation data may indicate our economic recovery is in need of some additional fuel.
[Read more...]US Employment Figures Continue to Improve
Good day. This will take care of my call from the bullpen for now, so Chris will have the ball for the next couple of weeks until Chuck returns at the end of the month. The summertime heat finally loosened its grip on St. Louis yesterday, and the dollar strength, which had a tight hold in the markets earlier in the week, saw some pullback. We didn’t see much action in the overnight markets Thursday morning, so everything was fairly flat when I sat down at my desk.
[Read more...]Greek Default Triggers Euro Weakness
Good day. Well, the ISDA people did determine that what Greece did last week — invoking the CACs (remember, collective action clauses) — meant that Greece was in default, so it triggered the credit default swaps (CDSs) to be executed. Now, I find this to be very interesting in that ISDA is a group of banks and financial firms, the same ones that wrote the CDS contracts. And you may remember me talking about the writers of these CDS contracts a few months ago.
[Read more...]Jumping On the GATA Bandwagon
Good day. What a long day on the desk yesterday! Whew! I’m glad I got through that without leaving a mark! And I came back! I laugh, because in the early days of EverBank, what I now call a long day would have been a short day! I remember buying breakfast sandwiches for the desk, lunch and pizza for dinner, as we worked on building the foundation that’s now EverBank World Markets. It’s now a strong foundation.
[Read more...]US Dollar Settles Into a Trading Range
The currency markets rode out the rough waters of Wednesday and made it to a bit calmer seas yesterday. The dollar traded in a fairly tight range as reports released in the morning showed initial jobless claims remained just over 350,000, and continuing claims also remained steady. Both of these numbers were slightly better than estimates, but neither moved the markets.
[Read more...]Is Oil the New Anti-Dollar?
Good day… And a Happy Friday to one and all! Apparently, an email friend named Craig sent a letter to the Bank of Canada pointing out the perils of the bank’s low-interest bias, and guess what? He received a reply from the governor of the Bank of Canada, Mark Carney! WOW! So I guess Craig actually has friends in high places!
[Read more...]Yen Weakens to 80!
Well, the crazy things that have been going on with Japanese yen (JPY) finally seem to be unwinding… For anyone new to class, the Japanese yen has been one of the best-performing currencies the past couple of years, and not for strong fundamentals… The economy has been in a funk for over two decades, interest rates have been zero for so long now — I don’t remember when they weren’t zero — an aging population and government debt up to their eyeballs, but still the yen rallied…
[Read more...]
Astounding Facts About Fed Treasury Purchases
The risk assets are still getting taken to the woodshed this morning, and once again, even stocks are getting sold. So there’s nowhere to hide these days from the dollar. Even Treasuries aren’t seeing a steady flow to them these days. So David Freese isn’t the only one swinging a big stick these days; the dollar has one, too!
[Read more...]